Comment: Backbooks are now front runners


With landlords squeezed and a slowdown in lending, it is more essential than ever to foster relationships with existing clients

From April, the Government will begin phasing out tax relief on buy-to-let mortgage interest.

By April 2020 all landlords will be charged tax on rental revenues and then given a flat-rate tax credit of just 20 per cent of the mortgage interest. Once the new system is in place, it could entirely wipe out many landlords’ profits.

It is going to be vital for brokers to work closely with clients’ tax advisers and accountants as they seek to tackle this. Ultimately, however, they will be limited to executing whatever plan the tax experts prepare.

That said, brokers will play a more central role in another respect. Buyers have been blessed with mortgage rates at historic lows in recent months. But that will not last forever, and a wide range of clients (including buy-to-let borrowers whose profits will be squeezed) is likely to be interested in remortgaging.

It is up to brokers to steal a march on any potential rate rises by contacting backbooks and encouraging clients to lock in low rates right now.

This could also help intermediaries to mitigate the reported slowdown in lending. Indeed, after six consecutive years of growth, it is expected to level out at about £240bn in 2017.

With these varying challenges in mind, it is becoming even more essential for brokers to foster relationships with existing clients. This is not only because remortgaging is expected to be one of the biggest growth areas of the year, but also because, by keeping a close eye on new developments and warning clients of the changes that will affect them, brokers will both demonstrate the value of their knowledge and secure the best client outcomes.

Toni Smith is sales operations director at First Complete and Pink